Sorry for necroing this thread, posting something that is obvious to most people (was for me in hindsight) and that will be moot when v0.8 will be released but I didn't found it written anywhere. If you don't have enough RAM for storing entire blockchain in RAMdisk you can put blkindex.dat into RAM and do a symlink to it from datadir. This will also speed up syncing and will require only about 1.8GB of ram instead of 6+GB.
Also remember to copy it back to hard drive when finished
Better, buy a 64gb SSD drive (around 50€) and move bitcoin datadir onto it. You should see the difference right away